Limit Order Book

Category: finance

A record of all outstanding limit orders for a specific financial instrument.

The book is the "market heartbeat." It shows the price levels where people are willing to buy and sell. High-frequency algorithms scan this book to predict short-term price movements and find liquidity holes.

Common Examples

• Deep analysis of the limit order book allows institutional traders to anticipate where the stock might encounter heavy resistance.
• The exchange publishes the limit order book to ensure transparency and provide a clear picture of market supply and demand.